While reading Things a Little Bird Told Me, written by Biz Stone, co-founder of Twitter, a particular thought on philanthropy caught my attention. Stone writes …

“People generally go about philanthropy the wrong way. They think you need to wait until you’re comfortable – i.e., rich – to give. We all define financial success differently, but I can tell you that for almost anyone at any income level, being rich exists only in the future. Waiting to give is a mistake. It doesn’t have to be about money. If you get involved early – now – the value of your gift is compounded over time. This is true in two ways. First, setting the habit of thinking of others early, before you have much to give, means that intention matures along with you. As your fortune increases, so does your inclination to give. Second, and perhaps more important, your gifts have a ripple effect, just like Stephen Colbert’s gift cards [you will have to read the book for the complete story]. Over the next two decades, the amount of good you will have done will be exponentially greater than if you’d waited until you were forty or fifty years old to write a cheque.

Having lot of money amplifies who you are. If you’re a nice person, and then you get money, you become a wonderful philanthropist. But if you’re a moron*, with lots of money you can afford to be bigger moron*.

In times of abundance, it’s human nature to seek a more purposeful life. This is often best satisfied by practicing selfless concern for the well-being of others.” (* Stone used a stronger word)

The theme that seemed to emerge from Biz’s experience is that once your bigger goals and ambitions start getting fulfilled, there is a high chance that boredom and emptiness will set in your life. It’s not a matter of if, but when. For some that stage might come much earlier and for some, a little later.

Question is what are you going to do about it? If the plan is to deal with the problem when it comes, then it might be too late. I inferred that giving back and helping others is actually a very selfish act. By starting early, you ensure availability of meaningful activities at the end of your ambitions.

Starting early may mean that you merely start thinking and researching about a cause which you find interesting. You may even approach it as a problem that needs to be solved which may or may not generate financial rewards for you.

As Biz mentions, it’s important to at least start thinking in that direction so that you start compounding the ‘thinking’ also over time. So when you’re rich, it would be much easier to deploy your resources efficiently and productively for whatever cause you choose.

Mohnish Pabrai, who runs a $850 million hedge fund in US, believes that philanthropy is an area far more difficult to excel in than stock picking. He says –

“A few years ago, my wife Harina and I were fortunate enough to have our net worth exceed $50 million and we decided it was time to start giving some of it away. I had always assumed we’d copy Warren Buffett’s approach, letting our wealth compound into my 70s and then giving away the hopefully-much-larger amount. But listening to Warren on the subject of philanthropy—he wisely says it’s far easier to make money than to give it away effectively—Harina and I decided we had better get started earlier….Getting good at philanthropy would take time, so our plan was to give away about 2% of our net worth each year. Hopefully, that would allow us to learn from our mistakes as we went and avoid blowing the whole wad at once.”

My intention is to nudge you to think about a subject, which many successful and wealthy people have discovered to be very important and difficult later in their lives. So that when you do reach your financial goals, you won’t be surprised with the overwhelming complexity and enormity of the task of ‘giving back’.

I think any plan is better than no plan. Having no plan will mean that you never get started but having some plan, even if a wrong one, will at least start moving you in some direction and eventually the efforts will start compounding over the years.

The plan could be as simple as Mohnish’s. Give away 1% of my net worth once the net worth crosses certain number. Then keep your ears and eyes open for social causes (businesses) which look promising (in terms of social impact ROI).

I would leave you with a thought from Charlie Munger –

“People should take way less than they are worth when they are favoured by life. I would agree that when you rise high enough, you’ve got a moral duty to be underpaid.”

Munger probably said this while talking about corporate governance, but I can relate a lot to his thought in the context of social governance, if there is such a word.

If you’re reading this, you’ve been favoured by life. Perhaps somebody created an opportunity which you exploited to reach where you’re today.

How about poking the life in such a manner that someone, somewhere, few decades down the line, can benefit from your efforts and feel ‘favoured by life’.

Don’t forget to return the favour life has conferred upon you.